From a Wall Street Journal article about American entrepeneurs departing China:
SHANGHAI—Fifteen years ago in California, a tall technology geek named Steve Mushero started writing a book that predicted the American dream might soon “be found only in China.†Before long, Mr. Mushero moved himself to Shanghai and launched a firm that Amazon.com Inc. and Alibaba Group Holding Ltd. certified as a partner to serve the world’s biggest internet market.
These days, the tech pioneer has hit a wall. He’s heading back to Silicon Valley where he sees deeper demand for his know-how in cloud computing. “The future’s not here,†said the 52-year-old.
For years, American entrepreneurs saw a place in which they would start tech businesses, build restaurant chains and manage factories, making potentially vast sums in an exciting, newly dynamic economy. Many mastered Mandarin, hired and trained thousands in China, bought houses, met their spouses and raised bilingual children.
Now disillusion has set in, fed by soaring costs, creeping taxation, tightening political control and capricious regulation that makes it ever tougher to maneuver the market and fend off new domestic competitors. All these signal to expat business owners their best days were in the past.
The article is accompanied by a graph illustrating foreign direct investment in China. I don’t think it shows what the editors presumably think it does since FDI in China remains at a very high level. Yes, it has plateaued since 2015 but it hasn’t declined.
A more interesting graph illustrate’s China’s net capital outflows.
I can’t disaggregate capital flight from Chinese overseas investment from FDI’s plateau. I can only relate an anecdote. 35 years ago I stood in the boardroom of my Fortune 500 then-employer trying to explain the complexities of doing business in China to a group of men with dollar signs dancing in their eyes who could only see the headline number: 1 billion population. They had asked me to head up their technical organization there, an opportunity I was about to decline. I suspect that tens of thousands of Americans went to China with dreams of fortune and that many have been disappointed. China was and may still be a place where great fortunes can be made. But not by the laowai
Between the lines, via Axios China’s Bill Bishop:
“The arrest will probably not derail the U.S.-China trade talks.”
“That could change if there are additional U.S. moves against Huawei, especially if they come from the executive branch.”
“Any foreign and especially U.S. tech firm that has supply chain reliance on China needs to be deep into planning for reducing that reliance, no matter how hard, painful and expensive such a shift would be.”
“Frankly, boards of directors of those firms are negligent at this point if they are not pushing for this.”